Manufacturers call for domestic gas reserves

A business coalition of Australia's largest manufacturers is warning the Ford job losses announced last week will be nothing compared to other retrenchments unless there is intervention by the Commonwealth and state governments to ensure access to cheaper natural gas.

The group says a gas supply crisis will come to a head by 2015 because gas currently earmarked for domestic manufacturing is being diverted to export, leaving Australians to pay one of the world's highest gas prices despite having some of the world's largest supplies of natural gas.

The chairman of Manufacturing Australia, ex-Pacific Brands chief Sue Morphet, says hundreds of thousands of jobs could be lost without intervention to keep a lid on rising gas prices.

"We need the Government to intervene because we need to ensure that there is good, competitively-priced natural gas available in the quantities that we need, otherwise there could be almost 200,000 Australian jobs that could go over the next five years," she warned.

"There could be a loss of 12 per cent of the manufacturing value-add - which is significant because the value-add of manufacturing is about $160 billion - we could lose up to $28 billion a year."

Sue Morphet says the job losses would be spread across a broad range of energy intensive manufacturing activities.

"Mostly from the agriculture, in terms of making fertilisers, aluminium, construction, glass products, bricks, paper, they'll all lose - they'll all lose jobs," she added.

Manufacturing Australia says the report estimates that half the jobs to be lost would be in manufacturing, while the other half would be in other sectors that will suffer from flow on impacts.

"We believe that there's about 9 per cent of direct employees, plus their add-on, which has been the big deal with Ford over the last week. It's not just the Ford jobs that go, there's all the add-on jobs," Sue Morphet explained.

"We believe that there will be double the number of jobs in total. So there's the 100,000 manufacturing jobs, and then there'll be the 100,000 add-on jobs."

Sue Morphet says the job losses in gas production caused by lower prices would be relatively small.

"Negligible in comparison - 5 per cent in the new gas industry, there's 4,000 ongoing jobs that will be part of the LNG process. There's jobs in the setup and they're going to occur anyway," she argued.

"What we're only looking for is 5 per cent of the gas that is being produced over the next five years that's going out with export, 5 per cent of that to be earmarked for domestic use."

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